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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2022
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___ to ___
Commission File No. 001-36297
Revance Therapeutics, Inc.
(Exact name of registrant as specified in its charter)
Delaware77-0551645
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer Identification No.)

1222 Demonbreun Street, Suite 2000, Nashville, Tennessee, 37203
(Address, including zip code, of principal executive offices)

(615) 724-7755
(Registrant’s telephone number, including area code)
Securities Registered Pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.001 per shareRVNCNasdaq Global Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes  ý    No  ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ý    No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filerEmerging growth company
Non-accelerated filerSmaller reporting company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial statement accounting standards provide pursuance to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes     No  ý
Number of shares outstanding of the registrant’s common stock, par value $0.001 per share, as of October 31, 2022: 82,273,582


Table of Contents

  Page
PART I. FINANCIAL INFORMATION
Item 1.
Item 2.
Item 3.
Item 4.
PART II. OTHER INFORMATION
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.


Revance®, the Revance logos, DAXXIFY™, OPUL®, and other trademarks or service marks of Revance Therapeutics, Inc. appearing in this Quarterly Report on Form 10-Q (this “Report”) are the property of Revance Therapeutics, Inc. This Report contains additional trade names, trademarks and service marks of others, which are the property of their respective owners. We do not intend our use or display of other companies’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by, these other companies.
Unless expressly indicated or the context requires otherwise, the terms “Revance,” “Company,” “we,” “us,” and “our,” in this document refer to Revance Therapeutics, Inc., a Delaware corporation, and, where appropriate, its wholly owned subsidiaries.


Table of Contents
PART I. FINANCIAL INFORMATION
ITEM 1. Condensed Consolidated Financial Statements (Unaudited)
3


REVANCE THERAPEUTICS, INC.
Condensed Consolidated Balance Sheets
(In thousands, except share and per share amounts)
(Unaudited)
 September 30,December 31,
 20222021
ASSETS
CURRENT ASSETS
Cash and cash equivalents$104,491 $110,623 
Short-term investments274,136 114,448 
Accounts receivable, net11,732 3,348 
Inventories17,178 10,154 
Prepaid expenses and other current assets8,057 7,544 
Total current assets415,594 246,117 
Property and equipment, net22,677 24,661 
Goodwill146,964 146,964 
Intangible assets, net42,866 55,334 
Operating lease right-of-use assets40,522 44,340 
Finance lease right-of-use asset10,021  
Restricted cash5,921 5,046 
Other non-current assets27,026 8,701 
TOTAL ASSETS$711,591 $531,163 
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable$744 $10,603 
Accruals and other current liabilities48,007 39,558 
Deferred revenue, current12,481 9,362 
Finance lease liability, current9,396  
Operating lease liabilities, current4,104 4,746 
Derivative liability 3,020 
Total current liabilities74,732 67,289 
Debt, non-current378,889 280,635 
Deferred revenue, non-current75,254 74,152 
Operating lease liabilities, non-current35,518 39,131 
Other non-current liabilities1,485 1,485 
TOTAL LIABILITIES565,878 462,692 
Commitments and Contingencies (Note 11)
STOCKHOLDERS’ EQUITY
Convertible preferred stock, par value $0.001 per share — 5,000,000 shares authorized, and no shares issued and outstanding as of September 30, 2022 and December 31, 2021
  
Common stock, par value $0.001 per share — 190,000,000 shares authorized both as of September 30, 2022 and December 31, 2021; 82,286,868 and 71,584,057 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively
82 72 
Additional paid-in capital1,754,513 1,466,369 
Accumulated other comprehensive loss(460)(18)
Accumulated deficit(1,608,422)(1,397,952)
TOTAL STOCKHOLDERS’ EQUITY145,713 68,471 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY$711,591 $531,163 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4

Table of Contents

REVANCE THERAPEUTICS, INC.
Condensed Consolidated Statements of Operations and Comprehensive Loss
(In thousands, except share and per share amounts)
(Unaudited)
 
 Three Months Ended September 30,Nine Months Ended September 30,
 2022202120222021
Revenue:
Product revenue$26,081 $18,296 $72,401 $46,982 
Collaboration revenue970 1,129 6,197 4,034 
Service revenue1,964 320 4,046 832 
Total revenue29,015 19,745 82,644 51,848 
Operating expenses:
Cost of product revenue (exclusive of amortization)8,681 5,827 24,130 15,453 
Cost of service revenue (exclusive of amortization)2,055 59 4,022 76 
Selling, general and administrative65,775 52,782 158,697 152,385 
Research and development26,103 30,095 81,745 86,787 
Amortization3,885 3,705 11,597 10,219 
Total operating expenses106,499 92,468 280,191 264,920 
Loss from operations(77,484)(72,723)(197,547)(213,072)
Interest income1,165 84 1,860 266 
Interest expense(6,917)(1,571)(12,722)(4,700)
Changes in fair value of derivative liability(875)(20)(980)(98)
Other income (expense), net118 (146)(381)(608)
Loss before income taxes(83,993)(74,376)(209,770)(218,212)
Income tax provision(700) (700) 
Net loss(84,693)(74,376)(210,470)(218,212)
Unrealized loss(74)(1)(442)(3)
Comprehensive loss$(84,767)$(74,377)$(210,912)$(218,215)
Basic and diluted net loss$(84,693)$(74,376)$(210,470)$(218,212)
Basic and diluted net loss per share$(1.17)$(1.10)$(3.00)$(3.24)
Basic and diluted weighted-average number of shares used in computing net loss per share72,208,285 67,782,033 70,215,148 67,297,954 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
5

Table of Contents

REVANCE THERAPEUTICS, INC.
Condensed Consolidated Statements of Stockholders’ Equity
(In thousands, except share and per share amounts)
(Unaudited) 
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
SharesAmountSharesAmountSharesAmountSharesAmount
Convertible Preferred Stock $  $  $  $ 
Common Stock
Balance — Beginning of period73,123,363 73 71,798,624 72 71,584,057 72 69,178,666 69 
Issuance of common stock in connection with follow-on offering9,200,000 9 — — 9,200,000 9 — — 
Issuance of common stock in connection with at-the-market offerings— — — — 1,734,853 1 761,526 1 
Issuance of common stock relating to employee stock purchase plan— — — — 171,824 — 91,562 — 
Issuance of common stock upon exercise of stock options91,743 — 41,900 — 122,377 — 921,376 1 
Issuance of restricted stock awards and performance stock awards, net of cancellation(44,752)— 99,965 — (257,611)— 1,136,221 1 
Shares withheld related to net settlement of restricted stock awards(83,486)— (101,712)— (268,632)— (250,574)— 
Balance — End of period82,286,868 82 71,838,777 72 82,286,868 82 71,838,777 72 
Additional Paid-In Capital
Balance — Beginning of period 1,521,411 — 1,446,643 — 1,466,369 — 1,500,514 
Issuance of common stock in connection with follow-on offering, net of underwriting discounts, commissions, and offering costs— 215,921 — — — 215,921 — — 
Issuance of common stock in connection with at-the-market offerings, net of issuance costs— (31)— (70)— 31,554 — 21,553 
Issuance of common stock relating to employee stock purchase plan— — — — — 2,018 — 2,206 
Issuance of common stock upon exercise of stock options— 512 — 314 — 621 — 12,823 
Issuance of restricted stock awards and performance stock awards, net of cancellation— — — — — — — (1)
Shares withheld related to net settlement of restricted stock awards— (1,853)— (2,694)— (4,613)— (6,944)
Stock-based compensation— 18,553 — 10,754 — 42,295 — 33,305 
Other— — — — — 348 — — 
Cumulative-effect adjustment from adoption of ASU 2020-06— — — — — — — (108,509)
Balance — End of period $1,754,513  $1,454,947  $1,754,513  $1,454,947 
    
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
6

Table of Contents

REVANCE THERAPEUTICS, INC.
Condensed Consolidated Statements of Stockholders’ Equity —(Continued)
(In thousands, except share and per share amounts)
(Unaudited)
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
SharesAmountSharesAmountSharesAmountSharesAmount
Other Accumulated Comprehensive Loss
Balance — Beginning of period (386) (2) (18)  
Unrealized loss— (74)— (1)— (442)— (3)
Balance — End of period (460) (3) (460) (3)
Accumulated Deficit
Balance — Beginning of period (1,523,729) (1,260,478) (1,397,952) (1,126,293)
Net loss— (84,693)— (74,376)— (210,470)— (218,212)
Cumulative-effect adjustment from adoption of ASU 2020-06— — — — — — — 9,651 
Balance — End of period (1,608,422) (1,334,854) (1,608,422) (1,334,854)
Total Stockholders’ Equity82,286,868 $145,713 71,838,777 $120,162 82,286,868 $145,713 71,838,777 $120,162 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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REVANCE THERAPEUTICS, INC.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited) 
 Nine Months Ended September 30,
 20222021
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss$(210,470)$(218,212)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation41,613 32,513 
Depreciation and amortization16,266 14,434 
Amortization of finance lease right-of-use asset4,502  
Amortization of debt discount and debt issuance costs1,373 935 
Amortization of discount on investments(399)(16)
Other non-cash operating activities1,265 140 
Changes in operating assets and liabilities:
Accounts receivable(8,384)171 
Inventories(6,606)(4,316)
Prepaid expenses and other current assets(947)5,141 
Lease right-of-use assets(10,705)(15,901)
Other non-current assets(297)(7,537)
Accounts payable(9,711)(4,578)
Accruals and other liabilities3,928 5,784 
Deferred revenue4,222 (447)
Lease liabilities10,984 13,712 
Other non-current liabilities 1,250 
Net cash used in operating activities(163,366)(176,927)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of investments(321,199)(178,588)
Finance lease prepayments(17,820)(7,700)
Purchases of property and equipment(1,922)(6,018)
Proceeds from maturities of investments161,183 135,000 
Net cash used in investing activities(179,758)(57,306)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock in connection with follow-on offering, net of discounts and commissions216,200  
Proceeds from issuance of notes payable, net of debt discount98,150  
Proceeds from issuance of common stock in connection with at-the-market offerings, net of commissions31,814 21,706 
Proceeds from the exercise of stock options and employee stock purchase plan2,639 15,029 
Principal payments on finance lease obligations(5,000) 
Taxes paid related to net settlement of restricted stock awards(4,613)(6,944)
Payment of debt issuance costs and offering costs(1,671)(327)
Other financing activities348  
Net cash provided by financing activities337,867 29,464 
NET DECREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH(5,257)(204,769)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — Beginning of period115,669 337,003 
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — End of period$110,412 $132,234 
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING INFORMATION:
Accrued debt issuance costs and offering costs$749 $ 
Capitalized stock-based compensation$682 $792 
Property and equipment purchases included in accounts payable and accruals$342 $1,206 
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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REVANCE THERAPEUTICS, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
1. The Company and Summary of Significant Accounting Policies
The Company
Revance is a biotechnology company focused on developing and commercializing innovative aesthetic and therapeutic offerings. Revance’s aesthetics portfolio includes DAXXIFY™ (DaxibotulinumtoxinA-lanm) for injection, the RHA® Collection of dermal fillers from Teoxane SA (“Teoxane”) and OPUL®, a relational commerce platform for aesthetic practices. Revance has also partnered with Viatris Inc. to develop a biosimilar to BOTOX®, which would compete in the existing short-acting neuromodulator marketplace. Revance’s therapeutics pipeline is currently focused on muscle movement disorders, including evaluating DAXXIFY™ in two debilitating conditions, cervical dystonia and upper limb spasticity.
Since inception, we have devoted substantial efforts to identifying and developing product candidates for the aesthetic and therapeutic pharmaceutical markets, recruiting personnel, raising capital, conducting preclinical and clinical development of, and manufacturing development for DAXXIFY™, DaxibotulinumtoxinA Topical, the onabotulinumtoxinA biosimilar, obtaining regulatory approval of DAXXIFY™ and the commercial launch of our products and services. As a result, we have incurred net losses and net cash outflows from operations. For the three and nine months ended September 30, 2022, we had a net loss of $84.7 million and $210.5 million, respectively. As of September 30, 2022, we had a working capital surplus of $340.9 million and an accumulated deficit of $1.6 billion. In recent years, we have funded our operations primarily through the sale of common stock, convertible senior notes, payments received from collaboration arrangements, sales of the RHA® Collection of dermal fillers and, in March 2022, we received the proceeds from notes issued in an aggregate principal amount of $100.0 million pursuant to the Note Purchase Agreement (defined in Note 8). As of September 30, 2022, we had capital resources of $378.6 million consisting of cash, cash equivalents, short-term investments. Since the FDA approval of DAXXIFY™ for the temporary improvement of moderate to severe glabellar lines in September 2022, we are eligible to draw on the Second Tranche (defined in Note 8) of $100.0 million in full under the Note Purchase Agreement provided certain conditions are met. We may also sell up to $150.0 million of our common stock under the 2022 ATM Agreement (defined in Note 9). Based on our updated evaluation of our ability to continue as a going concern, we have concluded that the factors which previously raised substantial doubt about our ability to continue as a going concern no longer exist as of the issuance date of this Report. We believe that our existing capital resources will be sufficient to fund the operating plan through at least the next 12 months following the issuance of this Report.
Basis of Presentation and Principles of Consolidation
The accompanying condensed consolidated financial statements are unaudited, and reflect all adjustments which are, in the opinion of management, of a normal recurring nature and necessary for a fair statement of the results for the interim periods presented.
Our condensed consolidated balance sheet for the year ended December 31, 2021 was derived from audited consolidated financial statements, but does not include all disclosures required by U.S. generally accepted accounting principles (“U.S. GAAP”). The interim results presented herein are not necessarily indicative of the results of operations that may be expected for the full fiscal year ending December 31, 2021, or any other future period. Our condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2021, which was filed with the Securities and Exchange Commission (the “SEC”), on February 28, 2022.
Our condensed consolidated financial statements include our accounts and those of our wholly-owned subsidiaries, and have been prepared in conformity with U.S. GAAP. All intercompany transactions have been eliminated.
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REVANCE THERAPEUTICS, INC.
Notes to Condensed Consolidated Financial Statements — (Continued)
(Unaudited)
Use of Estimates & Risks and Uncertainties
The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the condensed consolidated financial statements and accompanying notes. These estimates form the basis for judgments we make about the carrying values of our assets and liabilities, which are not readily apparent from other sources. We base our estimates and judgments on historical information and on various other assumptions that we believe are reasonable under the circumstances. U.S. GAAP requires us to make estimates and judgments in several areas, including, but not limited to, the incremental borrowing rate used to measure operating lease and finance lease liabilities, the recoverability of goodwill and long-lived assets, useful lives associated with property and equipment and intangible assets, the period of benefit associated with deferred costs, revenue recognition (including the timing of satisfaction of performance obligations, estimating variable consideration, estimating stand-alone selling prices of promised goods and services, and allocation of transaction price to performance obligations), deferred revenue classification, accruals for clinical trial costs, valuation and assumptions underlying stock-based compensation and other equity instruments, and income taxes.
The full extent of the impact of the COVID-19 pandemic on our future operational and financial performance will depend on future developments that are highly uncertain, including variant strains of the virus and the degree of their vaccine resistance and as a result of new information that may emerge concerning COVID-19, the actions taken to contain or treat it, and the duration and intensity of the related effects. The ongoing COVID-19 pandemic has and may continue to negatively affect global economic activity, the regulatory approval process for our product candidates, our supply chain, research and development activities, end user demand for our products and services and commercialization activities. For example, the timing of the FDA’s inspection of our manufacturing facility as a part of the regulatory approval process for DAXXIFY™ was delayed due to the FDA’s travel restrictions associated with the COVID-19 pandemic. We cannot be certain of the continued impact of the COVID-19 pandemic on the timing of the regulatory approval process for DAXXIFY™ in indications other than glabellar lines or on any supplemental biologics license applications (each, a “BLA”) or post-approval supplements we may file.
As of the date of issuance of these condensed consolidated financial statements, we are not aware of any specific event or circumstance that would require us to update our estimates, judgments or revise the carrying value of our assets or liabilities. These estimates may change as new events occur and additional information is obtained, and are recognized in the condensed consolidated financial statements as soon as they become known. Actual results could differ from those estimates and any such differences may be material to our condensed consolidated financial statements.
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REVANCE THERAPEUTICS, INC.
Notes to Condensed Consolidated Financial Statements — (Continued)
(Unaudited)
Inventory
Inventories consist of raw materials, work in process, and finished goods held for sale to customers. Cost is determined using the first-in-first-out (FIFO) method. Inventory costs include raw materials, labor, quality control, and overhead associated with the cost of production. Inventory valuation reserves are established based on a number of factors including, but not limited to, inventory not conforming to product specifications, product excess and obsolescence, or application of the lower of cost or net realizable value concepts. The determination of events requiring the establishment of inventory valuation reserves, together with the calculation of the amount of such reserves, may require judgment. No inventory valuation reserves have been recorded for any periods presented.
Products manufactured at a third-party contract manufacturer site prior to that site’s regulatory approval may be capitalized as inventory when the future economic benefit is deemed highly probable. A number of factors are considered in determining probability, including the historical experience of achieving regulatory approvals for the manufacturing process, the progress along the approval process, the shelf life of the product, and any other impediments identified. If the criteria for capitalizing inventory are not met, the pre-approval manufacturing costs of products are recognized as research and development expense in the period incurred. No inventories from any third-party contract manufacturer have been recognized for any periods presented.
Leases
We account for a contract as a lease when it has an identified asset that is physically distinct and we have the right to control the asset for a period of time while obtaining substantially all of the asset’s economic benefits. We determine if an arrangement is a lease or contains a lease at inception. For arrangements that meet the definition of a lease, we determine the initial classification and measurement of our right-of-use asset and lease liability at the lease commencement date and thereafter if modified. We do not recognize right-of-use assets or lease liabilities for those leases that qualify as a short-term lease.
The lease term includes any renewal options that we are reasonably assured to exercise. The present value of lease payments is determined by using the interest rate implicit in the lease, if that rate is readily determinable; otherwise, we use our estimated secured incremental borrowing rate for that lease term.
For our real estate operating leases, rent expense is recognized on a straight-line basis over the reasonably assured lease term based on the total lease payments and is included in operating expenses in the condensed consolidated statements of operations and comprehensive loss. In addition to rent, the real estate operating leases may require us to pay additional amounts for variable lease costs which includes taxes, insurance, maintenance, and other expenses, and the variable lease costs are generally referred to as non-lease components. For real estate operating leases, we account for lease and non-lease components separately.
For a finance lease for a manufacturing fill-and-finish line, interest expense from fixed payments on finance lease is recognized using the effective interest method. Finance lease right-of-use asset amortization is recorded within research and development expense on the condensed consolidated statements of operations and comprehensive loss, and finance lease liability interest expense is recorded in the interest expense on the condensed consolidated statements of operations and comprehensive loss. For our manufacturing fill-and-finish line asset group, we have elected to apply the practical expedient and account for the lease and non-lease components as a single lease component. Variable lease costs related to finance leases are expensed as research and development expense as incurred.
Recent Accounting Pronouncements
The recent accounting pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and we do not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on our present or future financial statements.
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REVANCE THERAPEUTICS, INC.
Notes to Condensed Consolidated Financial Statements — (Continued)
(Unaudited)
2. Revenue
Our revenue is primarily generated from U.S. customers. Our product and collaboration revenue is generated from the Product Segment, and our service revenue is generated from the Service Segment (Note 12). The following tables present our revenue disaggregated by the timing of transfer of goods or services:
Three Months Ended September 30, 2022Nine Months Ended September 30, 2022
(in thousands)Product RevenueCollaboration RevenueService RevenueTotalProduct RevenueCollaboration RevenueService RevenueTotal
Timing of revenue recognition:
Transferred at a point in time
$26,081 $ $121 $26,202 $72,401 $ $360 $72,761 
Transferred over time 970 1,843 2,813  6,197 3,686 9,883 
Total$26,081 $970 $1,964 $29,015 $72,401 $6,197 $4,046 $82,644 
Three Months Ended September 30, 2021Nine Months Ended September, 2021
(in thousands)Product RevenueCollaboration RevenueService RevenueTotalProduct RevenueCollaboration RevenueService RevenueTotal
Timing of revenue recognition:
Transferred at a point in time
$18,296 $ $166 $18,462 $46,982 $ $379 $47,361 
Transferred over time 1,129 154 1,283  4,034 453 4,487 
Total$18,296 $1,129 $320 $19,745 $46,982 $4,034 $832 $51,848 
Product Revenue
For the three and nine months ended September 30, 2022 and 2021, product revenue was generated from the sale of the RHA® Collection of dermal fillers.
Receivables and contract liabilities from contracts with our product customers are as follows:
September 30,December 31,
(in thousands)20222021
Receivables:
Accounts receivable, net$5,341 $3,297 
Total accounts receivable, net$5,341 $3,297 
Contract liabilities:
Deferred revenue, current$2,491 $1,331 
Total contract liabilities$2,491 $1,331 
Collaboration Revenue
Viatris Collaboration and License Agreement
Agreement Terms
We entered into a collaboration and license agreement with Viatris (the “Viatris Collaboration”) in February 2018, pursuant to which we are collaborating with Viatris exclusively, on a world-wide basis (excluding Japan), to develop, manufacture, and commercialize an onabotulinumtoxinA biosimilar.
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REVANCE THERAPEUTICS, INC.
Notes to Condensed Consolidated Financial Statements — (Continued)
(Unaudited)
Viatris has paid us an aggregate of $60 million in non-refundable upfront and milestone fees as of September 30, 2022, and the agreement provides for additional remaining contingent payments of up to $70 million in the aggregate, upon the achievement of certain clinical and regulatory milestones and of specified, tiered sales milestones of up to $225 million. The payments do not represent a financing component for the transfer of goods or services. In addition, Viatris is required to pay us low to mid-double digit royalties on any sales of the biosimilar in the U.S., mid-double digit royalties on any sales in Europe, and high single digit royalties on any sales in other ex-U.S. Viatris territories. However, we have agreed to waive royalties for U.S. sales, up to a maximum of $50 million in annual sales, during the first approximately four years after commercialization to defray launch costs.
Revenue Recognition
We re-evaluate the transaction price at each reporting period. We estimated the transaction price for the Viatris Collaboration using the most likely amount method. In order to determine the transaction price, we evaluated all of the payments to be received during the duration of the contract, which included milestones and consideration payable by Viatris. Other than the upfront payment, all other milestones and consideration we may earn under the Viatris Collaboration are subject to uncertainties related to development achievements, Viatris’ rights to terminate the agreement, and estimated effort for cost-sharing payments. Components of such estimated effort for cost-sharing payments include both internal and external costs. Consequently, the transaction price does not include any milestones and considerations that, if included, could result in a probable significant reversal of revenue when related uncertainties become resolved. Sales-based milestones and royalties are not included in the transaction price until the sales occur because the underlying value relates to the license and the license is the predominant feature in the Viatris Collaboration. As of September 30, 2022, the transaction price allocated to the unfulfilled performance obligations was $92.6 million.
We recognize revenue and estimate deferred revenue based on the cost of development services incurred over the total estimated cost of development services to be provided for the development period. For revenue recognition purposes, the development period is estimated to be completed in 2026. It is possible that this period will change and is assessed at each reporting date.

For the three and nine months ended September 30, 2022, we recognized revenue related to development services of $1.0 million and $6.2 million, respectively. For the three and nine months ended September 30, 2021, we recognized revenue related to development services of $1.1 million and $4.0 million, respectively.
Fosun License Agreement
Agreement Terms
In December 2018, we entered into a license agreement (the “Fosun License Agreement”) with Shanghai Fosun Pharmaceutical Industrial Development Co., Ltd., a wholly-owned subsidiary of Shanghai Fosun Pharmaceutical (Group) Co., Ltd (“Fosun”), whereby we granted Fosun the exclusive rights to develop and commercialize DAXXIFY™ in mainland China, Hong Kong and Macau (the “Fosun Territory”) and certain sublicense rights.
As of September 30, 2022, Fosun has paid us non-refundable upfront and other payments totaling $31.0 million before foreign withholding taxes. In accordance with the Fosun License Agreement, we are eligible to receive a milestone payment $7.0 million before foreign withholding taxes upon the FDA approval of the BLA of DAXXIFY™, which was approved in September 2022. We recorded this milestone payment in “accounts receivable, net” on the condensed consolidated balance sheets as of September 30, 2022, and the payment was received in November 2022. We are also eligible to receive (i) additional remaining contingent payments of up to $222.5 million upon the achievement of certain milestones based on the first calendar year net sales, and (ii) tiered royalty payments in low double digits to high teen percentages on annual net sales. The royalty percentages are subject to reduction in the event that (i) we do not have any valid and unexpired patent claims that cover the product in the Fosun Territory, (ii) biosimilars of the product are sold in the Fosun Territory or (iii) Fosun needs to pay compensation to third parties to either avoid patent infringement or market the product in the Fosun Territory.
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REVANCE THERAPEUTICS, INC.
Notes to Condensed Consolidated Financial Statements — (Continued)
(Unaudited)
Revenue Recognition
We estimated the transaction price for the Fosun License Agreement using the most likely amount method. We evaluated all of the variable payments to be received during the duration of the contract, which included payments from specified milestones, royalties, and estimated supplies to be delivered. We will re-evaluate the transaction price at each reporting period and upon a change in circumstances. As of September 30, 2022, the transaction price allocated to unfulfilled performance obligation was $38.0 million.
For the three and nine months ended September 30, 2022 and 2021, no revenue was recognized from the Fosun License Agreement.
Receivables and contract liabilities from contracts with our collaboration customers are as follows:
September 30,December 31,
(in thousands)20222021
Receivables:
Accounts receivable, net — Fosun$6,300 $ 
Total accounts receivable, net$6,300 $ 
Contract liabilities:
Deferred revenue, current — Viatris$9,930 $7,927 
Total contract liabilities, current$9,930 $7,927 
Deferred revenue, non-current — Viatris$37,259 $43,157 
Deferred revenue, non-current — Fosun37,995 30,995 
Total contract liabilities, non-current$75,254 $74,152 
Changes in our contract liabilities from contracts with our collaboration revenue customers for the nine months ended September 30, 2022 are as follows:
(in thousands)
Balance on January 1, 2022$82,079 
Revenue recognized6,197 
Billings and adjustments, net(3,092)
Balance on September 30, 2022$85,184 
Service Revenue
We offer customer payment processing and certain value-added services to aesthetic practices through the HintMD Platform, the legacy fintech platform, and OPUL®, the next-generation relational commerce platform (together with the HintMD Platform, the “Fintech Platform”). Generally, revenue related to the HintMD Platform payment processing service is recognized at a point in time and revenue related to the OPUL® payment processing service is recognized over time. For the Fintech Platform, revenue related to the value-added services component is recognized over time.
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REVANCE THERAPEUTICS, INC.
Notes to Condensed Consolidated Financial Statements — (Continued)
(Unaudited)
Receivables and contract liabilities from contracts with our service customers are as follows:
September 30,December 31,
(in thousands)20222021
Accounts receivable, net$91 $51 
Total accounts receivable, net$91 $51 
Contract liabilities:
Deferred revenue, current$60 $104 
Total contract liabilities, current$60 $104 

3. Cash Equivalents and Short-Term Investments
The following table is a summary of our cash equivalents and short-term investments:
September 30, 2022December 31, 2021
in thousandsCostGainsLossesFair ValueCostLossesFair Value
U.S. treasury securities$134,772 $1 $(187)$134,586 $ $ $ 
Commercial paper92,616   92,616 87,964  87,964 
Corporate bonds60,621  (265)60,356 26,502 (18)26,484 
Money market funds43,883   43,883 90,355  90,355 
U.S. government agency obligations29,806   29,806    
Yankee debt securities3,024  (9)3,015    
Total cash equivalents and available-for-sale securities$364,722 $1 $(461)$364,262 $204,821 $(18)$204,803 
Classified as:
Cash equivalents$90,126 $90,355 
Short-term investments274,136 114,448 
Total cash equivalents and available-for-sale securities$364,262 $204,803 
As of September 30, 2022 and December 31, 2021, we have no other-than-temporary impairments on our available-for-sale securities, and the contractual maturities of the available-for-sale securities are less than one-year.
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REVANCE THERAPEUTICS, INC.
Notes to Condensed Consolidated Financial Statements — (Continued)
(Unaudited)
4. Intangible Assets, net
The following table sets forth the major categories of intangible assets and the weighted-average remaining useful lives for those assets that are not already fully amortized:
September 30, 2022December 31, 2021
(in thousands, except for in years)Weighted-Average Remaining Useful Lives
(in years)
Gross Carrying AmountAccumulated AmortizationNet Carrying AmountWeighted-Average Remaining Useful Lives
(in years)
Gross Carrying AmountAccumulated AmortizationNet Carrying Amount
Distribution rights1.7$32,334 $(18,861)$13,473 2.4$32,334 $(12,799)$19,535 
Developed technology4.135,800 (11,128)24,672 4.935,800 (6,653)29,147 
Customer relationships1.810,300 (5,579)4,721 2.610,300 (3,648)